Known later as Sega Master System, Sega released SMS to compete with the NES. The console supported a number of accessories (like a light gun, 3D glasses, and at least 4 different varieties of controllers) and featured a number of successful games (Phantasy Star is a big one, other popular ones were Y's: The Vanished Omens, Alex Kidd in Miracle Worlds, Outrun and the later Sonic the Hedgehog port). The system also had ports for both cartridges and cards, though cartridges were more common.

Nevertheless, the console was not successful: in North America it was eclipsed by NES, and later by Sega's own Genesis; in Japan, both Famicom and PC Engine were much more popular. The later, smaller revision, called SMS II, did not help sales. I am actually surprised that SMS had a game released for it in Europe as late as 1996. If only Sonic would've appeared sooner, the SMS might've had a chance.